What does a free trade zone mean? What are its advantages?

Free trade zone: A free trade zone usually means that two or more countries or regions sign free trade agreements, remove tariff and non-tariff barriers for most commodities, remove market access restrictions for most service sectors, and open investment, thus promoting the free flow of production factors such as commodities, services, capital, technology and personnel, realizing complementary advantages and promoting common development.

The advantages of the free trade zone are: first, imported goods are cheaper and more secure. Direct-sale stores for imported goods are located in the free trade zone, and the price is cheaper than the market 10% to 30%. Benefit 2: Parallel imported cars are cheaper. Because it broke the monopoly of single-channel car purchase in 4S stores, the price was nearly 30% cheaper than the market.

Benefit 3: The cost of seeing a doctor is expected to drop, and ordinary people can experience the medical services of foreign-funded hospitals without going abroad. Benefit 4: Traveling abroad is "just leave". Sino-foreign joint venture travel agencies can register in the free trade zone, which improves the convenience of traveling abroad. Benefit 5: There are more and more job opportunities for foreign companies, the threshold for starting a business in the free trade zone is lower, and there are many preferential tax policies.

Reasons for a free trade zone:

1. Compared with the multilateral trading system, it is easier for countries in the region to reach an agreement on a free trade zone and produce practical results. At the same time, most of the existing free trade zones are fruitful, which has also inspired more countries to participate in free trade zones.

2. As far as regional or neighboring countries are concerned, free trade zones are conducive to further exerting the geographical advantages of economic and trade cooperation. Free trade zones between neighboring countries have many advantages, such as convenient personnel exchanges and logistics, similar language and culture, similar living habits and so on.

Therefore, neighboring countries and regions have more favorable conditions to expand and deepen economic cooperation to achieve mutual benefit and win-win, which is more obvious than the benefits brought by participating in the multilateral trading system.

3. While joining the multilateral cooperation mechanism, the conclusion of the free trade zone is conducive to promoting the economic structural reform of each member country, so that more external forces can be used to promote domestic reform.

Baidu encyclopedia-free trade zone